Is Amazon a monopoly?

Four smart takes

Jeff Bezos
(Image credit: (David Ryder/Getty Images))

Amazon must be stopped, said Franklin Foer at New Republic. It's easy to be "seduced by the deep discounts, the monthly automatic diaper delivery, [and] the ability to buy shoes or books or pinto beans or a toilet all from the same place." But the e-retail giant "has achieved a level of dominance that merits the application of a very old label: monopoly." To be sure, internet-age monopolies like Amazon are "a different species" from predecessors like U.S. Steel or Ma Bell, particularly since Amazon's intention isn't to saddle customers with higher prices. Instead, in its "pursuit of bigness," the company so brutally undercuts competitors, squeezes suppliers, and punishes those that dare to push back that its growth cannot be considered benign. Just witness its "record of shredding young businesses, like Zappos and Diapers.com, just as they begin to pose a competitive challenge," or its bullying tactics with publishers over control of the book market. This "big-footing necessitates a government response."

Don't be absurd, said Matthew Yglesias at Vox. "Amazon doesn't have any kind of monopoly." In the brick-and-mortar world, the company faces fierce competition from the likes of Walmart, Target, Home Depot, the Gap, and other major chains. In the digital sphere, it has to fend off bigger rivals like Apple and Google. It is true that in some of these retail markets Amazon has a rather dominant market share. "But having a lot of the market is not the same as having a monopoly." And if the company were really a monopoly, shouldn't it be minting profits? In the last quarter, Amazon lost $126 million, which is pretty typical. Last I checked, "'low and often non-existent profits' and 'monopoly' are not really concepts that go together."

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Sergio Hernandez is business editor of The Week's print edition. He has previously worked for The DailyProPublica, the Village Voice, and Gawker.